A tortilla shortage at Taco Bell could hurt sales and Yum Brands’ stock, analyst says

A shortage of tortillas at fast food chain Taco Bell is effecting the chain’s menu in some parts of the country and could weigh on parent Yum Brands’ stock temporarily, according to Bank of America Merrill Lynch.

The firm lowered its Taco Bell’s third-quarter same-store sales to a 1% decline due to the supply issues.

“[The] 10-inch tortilla shortage should be [a] near-term headwind,” Bank of America Merrill Lynch’s research analyst Gregory Francfort said about Yum Brands in a note to clients on Monday.

Last week, media reports came out that the Mexican food chain had a shortage of its 10-inch tortilla, which is used in products like burritos, quesadillas, grillers, and quesaritos, making up about 30% to 40% of entrees on Taco Bell’s menu, Francfort said.

“We note that the…